Family Businesses for Affordable Energy (FBAE) today announced a new economic impact study, finding that New Mexico’s solar/wind tax credits have created more than 11,700 jobs, $1.6 billion in economic activity and more than $600 million in new labor income.
The FBAE analysis estimated the economic impact of New Mexico’s Renewable Energy Production Tax Credit (REPTC) and now represents the most current research on the subject. The REPTC, originally implemented in 2003, is a credit against New Mexico personal or corporate income tax that is available to companies that produce electricity from renewable resources for commercial sale.
“These tax credits are a phenomenal success for New Mexico,” said Palmer Schoening of the FBAE. “Taxpayers are getting a huge return on their investments in clean energy – new jobs, new investments, new economic activity –while reaping the additional environmental benefits that come from clean energy. This is a win-win-win situation for taxpayers, consumers, and businesses throughout New Mexico.”
Findings of the study include:
- A total of $120 million in Renewable Energy Production Tax Credits have been claimed over the past 13 years. During that time, New Mexico has made significant progress in developing its wind and solar power capacity, gaining 13 commercial wind facilities with nameplate capacity of 1.1 gigawatts and 46 solar photovoltaic (PV) facilities with nameplate capacity of 452 megawatts.
- During that time, REPTC-certified power producers have spent over $1 billion in New Mexico to construct, equip, operate, and maintain 31 generation facilities. Expenditures by REPTC-certified power producers have supported 11,771 full and part time jobs, $611 million in employee compensation, and $1.6 billion in economic activity statewide.
- For every $1 in state tax expenditure, REPTC-certified projects generated over $5 in labor income.
- These economic impacts have generated state and local tax revenue totaling $74.6 million and averaging $6.8 million annually.
Palmer called for the extension of the REPTC, an extension that will lead to more new jobs and investments, while helping to lower the cost of energy for families and businesses. The REPTC is set to expire January 1, 2018. A bipartisan bill (HB440 and SB432) changes and temporarily extends the program. The goal: to support continued investments in New Mexico while also adjusting the tax credit itself to better reflect the decreased costs of building renewable energy facilities.
In addition, the bill provides a more appropriate end date for the program, phasing out the production tax credit by 2023—as opposed to ripping the rug out from under companies already invested as well as the ones on the waiting list.
“New Mexico has made great progress in renewable energy since implementation of these tax credits,” he said. “Our study proves beyond any doubt that for every dollar you invest, New Mexico gets $5 dollar back in labor income, thousands of new jobs and billions in new investment. Solar and wind done right reaps great benefits for New Mexico, and New Mexico has been doing it right.”
O’Donnell Economics and Strategy conducted the study. Kelly O’Donnell is an economist and research professor at the University of New Mexico Institute for Policy, Evaluation, and Applied Research. Her specialties include regional economic development, economic impact analysis, and state fiscal policy. Prior to academia, Dr. O’Donnell held a series of leadership roles in New Mexico state government including Director of State Tax Policy, Deputy Cabinet Secretary for Economic Development, and Superintendent of the New Mexico Regulation and Licensing Department. She holds a PhD in Economics from the University of New Mexico.
O’Donnell can be reached at 505-659-5702 or firstname.lastname@example.org.
Schoening can be reached at 202-787-1399 or email@example.com